Smart Utilities are Embracing Social Media as a Key Part of their Customer Engagement Strategies

October 12, 2011

As in other industries, social media has begun to penetrate many utility companies in recent years.  Facebook, Twitter, YouTube, company blogs and other forms of social media offer a degree of interaction and transparency not available in other forms of media.  At the same time, many companies struggle with the right mix of customer engagement through such online forums.  And utility managers often have legitimate concerns about connecting with customers in such open formats, where the utility surrenders control of the message.  Despite these issues, customers show no signs of abandoning social media, and utilities will need to incorporate these tools as part of their broader customer engagement programs going forward.  A new report from Pike Research forecasts that approximately 57 million customers worldwide will use social media to engage utilities in 2011, a number that will rise to 624 million customers by the end of 2017.  Utility spending on social media, meanwhile, will increase to $317 million in 2017, from about $195 million in 2011.

“Social media is a tricky play for utilities, as it is for other industries unaccustomed to such a transparent and uncontrolled form of communication with customers,” says senior analyst Neil Strother.  “But there are ways to use the new social channels that benefit both the utility and the customer.”

The most obvious use case for social media in the utility industry is during power outages or other events that affect customer service.  Indeed, many customers now use Twitter, in particular, as a primary source of information during such interruptions, and the public image of utilities that do not make use of social media to update customers in a timely fashion will likely suffer as a result.  While the concrete ROI on the use of social media remains elusive, the reality is that utilities cannot really ignore the fact that customers are using social media; conversations about utilities and the service they provide are taking place beyond the company’s control, where sometimes false or misleading information can do harm to the brand.  Thus, it is in a utility’s own best interest to engage with customers in social channels, where they have at least a chance to steer the conversation and provide accurate information. 

Pike Research finds that the most important steps in developing an effective social media strategy include training staff in best practices, becoming adept at the “Big Four” social networks (Twitter, Facebook, YouTube, and LinkedIn), adopting listening tools such as Radian6 and Jive Software, and, in many cases, deploying a mobile application that effectively leverages social media tools.

Pike Research’s report, “Social Media in the Utility Industry”, highlights the key drivers and barriers that are defining the development of social media in the utility industry, and offers case studies from utility companies that have found success in social channels.  The report also offers strategies and best practices for utilities seeking to avoid mistakes and minimize their risks.  Company profiles are provided for key industry players, and market forecasts are included through 2017 for utility spending on social media tools as well as the number of customers using social media to engage with utilities.  An Executive Summary of the report is available for free download on the firm’s website.

Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets.  The company’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Smart Grid, Smart Transportation, Smart Industry, and Smart Buildings sectors.  For more information, visit www.navigantresearch.com or call +1.303.997.7609.

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